Cheap Russian LNG Keeps Flowing Despite EU Promises-amtomessage

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2025-09-16

Cheap Russian LNG Keeps Flowing Despite EU Promises

The European Union could phase out all Russian natural gas purchases within a year, U.S. Energy Secretary Chris Wright said earlier this month. In fact, he said, the EU could switch from Russian gas to U.S. LNG in as little as six months. Yet there is a problem with this, and it is a pretty serious one: prices. Some are calling the EU hypocritical; others are justifying it in its continued purchases of Russian energy. It is an awkward situation that is likely to become even more awkward.

In 2024, the EU made headlines for something its leadership would rather not see in the papers: the imports of Russian liquefied natural gas into the bloc hit an all-time high—despite sanctions on the Russian energy industry and LNG producers specifically and despite repeatedly stated intentions to phase out all Russian gas imports after embargoing crude oil imports.

The reason was quite simple. As a Rystad Energy analyst put it to the Financial Times at the end of last year, Russian LNG had a “significantly lower” price than U.S. liquefied gas. The EU leadership has been so desperate to axe Russian energy imports that, after trying to make member states outlaw LNG imports from the country, there were discussions earlier this year about tearing up long-term contracts without having to pay penalties for that.

None of these discussions and attempts to ban Russian LNG have stopped the deliveries, however. In the first half of this year, imports actually increased further in terms of value. The total value of LNG imported from Russia between January and June stood at 4.4 billion euros, equal to about $5.16 billion. That was up from 3.47 billion euros for the first half of 2024, or about $4.1 billion.

It is little wonder that Secretary Chris Wright would rather see that money go to U.S. producers of liquefied natural gas. After all, the Trump administration has clearly stated it has an energy dominance agenda, which it is pursuing diligently. It is working, too. Over the first half of the year, the total imports of liquefied natural gas into the European Union rose by 25% from a year earlier, hitting an all-time high. Of these total imports, 55% came from the United States versus 14% from Russia.

The European Union is already the biggest market for U.S. liquefied gas. Yet here is a twist: it is also the biggest buyer of Russian liquefied gas. The EU took in about two-thirds of U.S. LNG over the first eight months of 2025. Over the first half, it also took 51% of Russian LNG exports—more than Russia’s new top energy client, China. Not only this, but according to Finland-based think tank Centre for Research on Energy and Clean Air, the European Union was also the biggest foreign buyer of Russian pipeline gas—despite flows being a fraction of what they used to be before 2022.

While this is going on, the European Union’s energy commissioner promised once again that the bloc would be cementing its deadline for giving up all Russian energy imports for January 2028. Dan Jorgensen said as much last week, despite the U.S. Energy Secretary’s statement about moving the deadline forward. The reason: price stability.

The EU must balance sanctions with price stability and security of supply, the energy commissioner said, warning that a rushed cutoff could spark sharp market dislocations. The EU’s preferred approach relies on building out replacement volumes from U.S. and Qatari LNG, investing in domestic renewables, and tightening sanctions enforcement against the shadow fleet carrying Russian crude through non-EU ports.

Of course, if this worked, it would have already been done—Chris Wright was not exaggerating when he said the EU could boost U.S. LNG import volumes quite fast. Yet greater U.S. LNG volumes come at a cost, so the EU is desperately looking for a cheaper alternative, perhaps to avoid swapping one massive dependence for another, even more massive. The problem here is that Qatar is not that alternative, not with the EU’s emission requirements for LNG importers.

Qatar is one of the biggest suppliers of liquefied natural gas to the European Union. Last year, the EU adopted something called the Corporate Sustainability Due Diligence Directive with the purpose of ensuring that “companies in scope identify and address adverse human rights and environmental impacts of their actions inside and outside Europe.” Failure to comply would result in fines up to 5% of a company’s annual global turnover. “If the case is that I lose 5 per cent of my generated revenue by going to Europe, I will not go to Europe . . . I’m not bluffing,” Qatar’s energy minister said earlier this year.

So, the EU remains stuck between its ambitions to squeeze Russia’s energy export revenues, its desire to play along with the Trump administration and boost energy buying from the U.S., and its need to have relatively affordable energy to stem its industrial decline—while not looking hypocritical. It’s certainly a tough act.

By Irina Slav for Oilprice.com

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